Federal Reserve Report to Congress Cites 'Stepped-Up' Inflation

A new Federal Reserve report to Congress indicates that U.S. inflation 'stepped up further this spring,' driven by factors such as tariffs, increased energy costs from the Middle East conflict, and the booming buildout of artificial intelligence technology. The Fed's preferred Personal Consumption Expenditures Price Index is currently running at approximately double its 2% target as of May. The report also notes that the labor market has stabilized, with the June unemployment rate at 4.2%. This marks the first monetary policy report under the new Fed Chairman Kevin Warsh, who is scheduled to testify before congressional committees next week.